Friday, January 21, 2011

How to Make Money on SpotCloud (Provider Pricing Guide)

One of the first questions SpotCloud providers ask me after they've setup their infrastructure and made their capacity available on SpotCloud is how to effectively price their capacity. There really is no easy answer, there are a lot of factors that dictate SpotCloud capacity pricing.

For example competition from a particular geography can lead to a higher or lower price. (Basic supply and demand) What I have noticed is that providers from specific regional hot spots such as Brazil, Russia and Asia tend to be able to price higher than places like San Francisco which tend to be more capacity saturated. Another question is what should the price be based on. My answer is typically it should be a combination of your fixed costs and a markup. It's also better to base it on the element that is the hardest (costliest) to share and delegate which in our case is typically RAM or potentially bandwidth. Also before you can hope to define a price you need to be able to understand what your own costs are on a monthly basis, utilization is also a key component.

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Reuven Cohen ~ @ruv

An instigator, part time provocateur, bootstrapper, amateur cloud lexicographer, and purveyor of random thoughts, 140 characters at a time.

Reuven is an early innovator in the cloud computing space as the founder of Toronto based Enomaly in 2004 (Acquired by Virtustream in 2012). Enomaly was among the first to develop a self service infrastructure as a service (IaaS) platform (ECP) circa 2005. As well as SpotCloud (2011) the first commodity style cloud computing Spot Market.

Today he leads Citrix (NASDAQ: CTXS) world wide advocacy efforts with a particular focus on increasing the volume, reach and influence of Citrix's extensive portfolio of technology solutions used by more than 260,000 customers and 100 million end users across the globe.

Reuven writes "The Digital Provocateur" column for Forbes Magazine, he is the co-founder of CloudCamp (100+ Cities around the Globe) CloudCamp is an unconference where early adopters of Cloud Computing technologies exchange ideas and is the largest of the ‘barcamp’ style of events. He is also the co-host of the DigitalNibbles Podcast sponsored by Intel